Jared Kaltwasser, HCPLive

This article originally appeared on HCPLive.com.

Credit cards offer many conveniences—they can replace cash, are accepted virtually everywhere, and offer rewards like frequent flier miles. They also provide protection against fraudulent purchases charted to your card.

However, not every fraud liability protection is created equal. That fact prompted the consumer finance website CardHub to launch a study of credit card fraud liability protection programs. Their findings offer important tips for consumers who might otherwise take for granted that their card will reimburse them for any fraudulent purchases.

The good news is that all 4 major card networks offer $0 liability guarantees for customers who fall victim to unauthorized transactions. What’s more, that liability comes automatically in most cases, though not for non-reloadable, provisional pre-paid cards.

However, in many cases the onus is on the customer to notice the fraud and promptly report it to the company. Also, CardHub found that while many view transactions processed with a PIN code as more secure, credit card companies typically earn a higher profit on debit transactions “verified” by a signature. Thus, in some cases the liability protections are stronger when you sign for a debit purchase, rather than entering your PIN number.

In general, CardHub found few differences between the protections offered by the 4 major credit card companies—American Express, Discover, MasterCard, and Visa. However, there’s one string attached to the protections offered by MasterCard and Visa.

Specifically, Visa and MasterCard offer a $0 liability guarantees for all signature-verified debit card purchases. If you use a PIN number, however, the $0 liability promise is only in effect if the purchase is processed by the credit card company’s own processing network. If not, the protection defaults to the minimum protection required by federal law.

The trouble, says CardHub, is that consumers have no way of knowing whether their debit transaction was processed using their card vendor’s network or a different network. Thus, it’s impossible to know at the point of sale whether the transaction will qualify for fraud liability protection.

The safest bet, the report says, is to avoid debit and make credit your primary purchasing mechanism.

To find out more specifics on credit card liability protections, including the policies of a variety of store-branded credit cards, visit CardHub.

Articles

Credit cards offer many conveniences-they can replace cash, are accepted virtually everywhere, and offer rewards like frequent flier miles. 